The QG processor defaults to the RESET pin being disabled.Is this a problem for establishing BDM connection? Does the reset pin still need a pullup if RESET is not enabled?Is the only way to establish BDM connection then to cycle power?

If the QG device is blank (and the watchdog is constantly being triggered), then you must power cycle in order to establish BDM connection. Once the device has been programmed with running code, this power cycle is no longer necessary.